HUD delivers report on probe

March 16, 2006

By PAT LITOWITZ
plitowitz@ncnewsonline.com

A federal agency has concluded its investigation of the Lawrence County Housing Authority and its failed nonprofit creation.

The U.S. Department of Housing and Urban Development Wednesday forwarded its findings to Robert Evanick, the housing authority's executive director. Evanick acknowledged receiving the report, which addressed the authority's role in relationship to Affordable Housing of Lawrence County.

However, Evanick said he could not release the information in the report until the authority solicitor, Louis Perrotta, and board members had an opportunity to review it.

The investigation was expected to center on the $200,000, no-interest loan the authority provided to Affordable Housing when it was created in late 2003. The transfer of the authority's laundry operations to the nonprofit group was reportedly a matter of concern.

Attempts to reach a representative of HUD's Region III office in Philadelphia, which oversees the local housing authority, were unsuccessful.

The findings come as Affordable Housing prepares to cease operations.

President William Bonner and treasurer Deno DeLorenzo are its only remaining board members. Bonner, an official with First Commonwealth Bank, was elevated to the chairmanship after mass resignations in December and January by Evanick, attorney Frank Natale II, New Castle City Councilwoman Karen DeCarlo, the Rev. James Blackwell and housing authority board member Donald "Ducky" Conti.

DeLorenzo, who is Affordable Housing's accountant, joined the board Jan. 5.

Affordable Housing's collapse comes three months after the $327,500 purchase of seven properties in New Castle. In March 2005, the agency purchased a house at 1114 Cunningham Ave. for $12,500. The nonprofit entity entered into two loans totaling $290,000 through First Commonwealth Bank.

In a letter to HUD's Pittsburgh office, dated Wednesday, Bonner offered to turn over ownership of the houses to the government in exchange for assuming the mortgages.

"Due to the lack of sufficient resources, our organization cannot provide the necessary attention to bring these houses to full condition, and with minimum occupancy at present, cannot anticipate full market value or full investment value upon liquidation," Bonner wrote.

HUD was asked to respond to the offer within 30 days. If Affordable Housing's offer is rejected, the group will sell the properties. Bonner said if that is unsuccessful, then bids will be accepted.

"It is unfortunate that these measures must be taken," Bonner said. "I personally wish that the time and resources were available to give the greatest effort for repayment of the obligation (to First Commonwealth), but I also anticipate little chance of repayment of the obligation under these conditions."